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Cape Town - The total abolition of exchange controls, bold and decisive action in the fight against corruption and patronage, crucial interventions in social security to encourage 'beneficial economic behaviour' are called for by the Democratic Alliance in its alternative medium term budget policy statement presented on Monday.
In a press briefing in Parliament Dion George and Kobus Marais, the party spokesperson on finance said: "Government concern over the value of the rand is focussed in the wrong place - on how to depreciate the currency."
But they suggest that short term capital inflows do not improve our medium to long term economic prospects. "To provide relief in the short term, remaining foreign exchange controls should be scrapped," George said.
He added that the most enduring and effective solution to concern over the value of our currency is to design an economy that is more attractive to long term investment in the productive capacity of our economy. If the economy is an attractive enough investment destination, it will retain capital for a longer duration, invested in our productive capacity, to the benefit of our sustained economic development.
"Debate on nationalisation drives negative perceptions and uncertainty over the security of investment in South Africa and defeats this objective at the outset," George said.
He told the briefing: "Outright nationalisation, or by stealth in the form of state mining and banking companies, introduces further inefficiencies into an economy, increases investment risk and widens the scope for market and governance failure. Government simply cannot provide the number of jobs necessary to sustain a viable economy or to make a substantial impact on poverty reduction. The so-called Developmental State model, driven by state owned enterprises, has proven its fundamental flaws. Government cannot be located at the centre of our economy."
The DA said it believes that government has not implemented its fight against corruption and that bold and decisive action is required. "The influence of the auditor-general needs to be strengthened to ensure that appropriate consequences can be pursued when governance fails within government departments," George said.
"The procurement process has deteriorated to the extent that National Treasury is no longer able to ensure its integrity against massive leakage through tenderpreneurship, dubious black economic empowerment transactions and other fraudulent activities."
He also said that at the rate social security is growing it is becoming increasingly unaffordable, and crowding out other priorities.
"The problem with the social security net is not that it is generous, but rather that it supports too many recipients. Pension and Social Security reform will partially alleviate the unsustainable burden on available public financial resources," he said.
"To ensure that social security remains sustainable in the longer term and that poverty alleviation leads to poverty reduction, more South Africans need to be employed and contribute to the tax revenue pool."
He said that although government cannot provide the jobs itself, it can facilitate an environment that will. A range of initiatives are required to accelerate the establishment of labour absorbing entrepreneurial and small business enterprises, and globally competitive trade and industrial activity.
In a press briefing in Parliament Dion George and Kobus Marais, the party spokesperson on finance said: "Government concern over the value of the rand is focussed in the wrong place - on how to depreciate the currency."
But they suggest that short term capital inflows do not improve our medium to long term economic prospects. "To provide relief in the short term, remaining foreign exchange controls should be scrapped," George said.
He added that the most enduring and effective solution to concern over the value of our currency is to design an economy that is more attractive to long term investment in the productive capacity of our economy. If the economy is an attractive enough investment destination, it will retain capital for a longer duration, invested in our productive capacity, to the benefit of our sustained economic development.
"Debate on nationalisation drives negative perceptions and uncertainty over the security of investment in South Africa and defeats this objective at the outset," George said.
He told the briefing: "Outright nationalisation, or by stealth in the form of state mining and banking companies, introduces further inefficiencies into an economy, increases investment risk and widens the scope for market and governance failure. Government simply cannot provide the number of jobs necessary to sustain a viable economy or to make a substantial impact on poverty reduction. The so-called Developmental State model, driven by state owned enterprises, has proven its fundamental flaws. Government cannot be located at the centre of our economy."
The DA said it believes that government has not implemented its fight against corruption and that bold and decisive action is required. "The influence of the auditor-general needs to be strengthened to ensure that appropriate consequences can be pursued when governance fails within government departments," George said.
"The procurement process has deteriorated to the extent that National Treasury is no longer able to ensure its integrity against massive leakage through tenderpreneurship, dubious black economic empowerment transactions and other fraudulent activities."
He also said that at the rate social security is growing it is becoming increasingly unaffordable, and crowding out other priorities.
"The problem with the social security net is not that it is generous, but rather that it supports too many recipients. Pension and Social Security reform will partially alleviate the unsustainable burden on available public financial resources," he said.
"To ensure that social security remains sustainable in the longer term and that poverty alleviation leads to poverty reduction, more South Africans need to be employed and contribute to the tax revenue pool."
He said that although government cannot provide the jobs itself, it can facilitate an environment that will. A range of initiatives are required to accelerate the establishment of labour absorbing entrepreneurial and small business enterprises, and globally competitive trade and industrial activity.
